U.K. Faces US$ 2.07 Billion EU Fine Over Import Fraud

The British government may have to pay the European Union (EU) £1.7 billion (US$ 2.07 billion) in lost custom duties after failing to stop Chinese importers from committing customs fraud for years.

The EU’s 28 member states belong to a customs union and a common tariff is placed on goods imported from outside this bloc. (Photo: George Hodan CC0 1.0)The European Anti-Fraud Office (OLAF) announced Wednesday that between 2013 and 2016 the UK cost the EU budget millions in duties because organized crime groups used fake invoices to evade customs taxes.

"Despite repeated efforts deployed by OLAF, and in contrast to the actions taken by several other Member States to fight against these fraudsters, the fraud hub in the UK has continued to grow," a statement from OLAF said.

Importers undervalued clothing, shoes and other goods coming from China—many of which ended up on the black market in other parts of the EU, according to investigators.

OLAF found the UK is a "significant hub" for such undervaluation fraud and that despite repeated warnings, they haven't taken action.

"To date, they have not initiated any criminal investigations in relation to these frauds," the statement said.

In 2016, the UK alone was responsible for 79% of the £709 million (US$ 862 million) losses in customs duties for the EU budget, according to Olaf.

A spokesperson for the British Prime Minister has said the government does not "recognize the figures" and that the relevant authorities are looking into it.